Hero Pulls out of Daimler Commercial JV
Hero Group has now pulled out of its JV with Daimler to produce commercial vehicles. Hero Group cited difficult economic situation and weak demand in India as the reason of withdrawing from the joint venture.
"We are disengaging from the joint venture, but the company (joint venture) will continue to exist and run by Daimler. The reason for it is the current economic slowdown and we would not like to commit such big investment in the circumstances," Hero Corporate Services Chairman Sunil Kant Munja.
Daimler said Hero will maintain a conservative profile from now on. It will focus on its core business and return its 40 percent stake in the joint venture, Daimler Hero Commercial Vehicles Ltd., to its Daimler Trucks unit. No financial details of the break up were revealed.
"In light of the current economic downturn, declining market conditions and the group's strength, Hero Group has decided to maintain its focus and continue to grow its core business and not to pursue the commercial vehicles business at this time," said Sunil Kant Munjal, the chairman of Hero Corporate Service Ltd.
[Via: cartradeindia]
JK Tyre to invest Rs 500 crore towards capacity expansion
JK Tyres has announced its plans to invest about Rs 500 crore towards expansion, over the next 18 months. The aim is to expand domestic tyre production capacity to more than nine million tyres per annum.
Due to a slowdown in demand, JK Tyres was actually forced cut production by about 5% last year - against an installed capacity of 8.8 million tyres, the company only produced 7.54 million tyres. However, the company wants to go ahead with expansion plans to make sure it's in a strong position when the market finally revives.
JK Tyre, which had earlier invested Rs 300 crore in its truck radial tyre manufacturing facility in Mysore, will invest another Rs 315 crore to bring up capacity to 1.2 million tyres per annum. The company will also invest Rs 120 crore in its other plant in Mysore, which makes off-road tyres.
Finally, Rs 50 crore will be invested in JK's car radial tyre manufacturing facility in Gwalior, to increase capacity to five million tyres per annum. Over the next one year, JK Tyres aims to expand into North American and Latin American markets.
[Via: indiaautomotive]
Benelli attracts investment
Qianjiang Motor - the Chinese company that acquired Benelli in 2005 - is looking at investing up to 20 million euros towards developing new Benelli motorcycles. Haimei Yan, the man who heads Qianjiang, is of the view that the conpany won't give up on the newly acquired brand. Though not profitable yet, they're not giving up anytime soon on Benelli. 'We are here to stay and we believe in the project. We have creativity and the ability to design new motorcycles,' says Yan.
The new Benelli motorcycles that are expected to be launched by the end of this year include the Due 756, which will be powered by a 90bhp, 756cc parallel twin, and a 600cc supersports machine fitted with an all-new 600cc inline-four, for which the target output is said to be 130bhp at 15,500rpm. With its new bikes and tighter focus on quality control, Benelli will be profitable in a few years time, says Yan.
The biggest obstacle, according to Yan, is the way business is conducted in Italy. 'Rampant Italian bureaucracy, the convoluted system of granting various permits and chaotic business processes hamper Benelli's growth and development,' he says.
[Via: BIKE]
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